SOUTH FORK— This year’s budget process has begun and South Fork Town Administrator Dan Hicks and Town Clerk Amanda Hill are reaching out to the community to explain the process involved when creating the budget.
“We want people to understand the process so that they will understand the numbers,” explained Hicks. In the past, several area residents have expressed their misunderstanding of how a budget is created and where the specific line items in the town’s budget come from. It was after these comments were made in town meetings and on a personal basis, that town staff and town board members came up with the idea of explaining the process prior to releasing the budget for the year.
In an effort to make it as easy to understand as possible, Hicks made a chart to explain the ins and outs of creating a budget. During their efforts, Hicks and Hill decided to begin with the definition of a budget, which is as follows, “An estimation of revenue and expenses over a January through December timeframe. The budget is compiled at the beginning and then reevaluated on a monthly basis against the actual results.”
Hicks continued to explain the process beginning with revenue and where it comes from in South Fork. According to Hicks, revenue for the town of South Fork comes from five different sources, which is significantly smaller than other communities that collect other revenues such as property tax. The revenue relates only to South Fork proper, which is within town limits only. The five sources of revenue are sales tax, which comes from anything that is purchased within the town limits. Sales tax for South Fork equals 7.5 percent. It is then broken down into sections, 2.9 percent is given to the state, 2.6 percent is given to Rio Grande County and 2.0 percent actually goes to the town.
Next is tourism tax. This tax is collected by vacation rentals in the town; hotel and bed and breakfasts also pay into the tourism tax. South Fork generates 1.9 percent tourism tax that is then transferred to the state, who delegates it to Rio Grande County where a minimal percentage is transferred back to the town. There is also an “other tax” section of revenue that generates a small percentage to the town through state taxes such as fuel sales.
The last two forms of revenue for South Fork come from traffic fines, which include speeding tickets and grant funding. Grant funding is public funds that are allocated for specific projects and typically require matching funds that are provided by the applying party.
Next, town staff compare the town’s revenue to its expenses from the past several years. Expenses are generated through five departments that include law enforcement, road and parks, town municipal buildings and property, planning and zoning and administrative. Each department breaks down their specific budgets into line items based off of past expenditures, giving an estimated amount to town staff to consider for the coming budget.
During the month of October, Hill and Hicks create a draft budget about once a week, before reviewing, adjusting and recreating another draft. By the end of October, a final draft is created and turned into the board of trustees for review during their monthly work session.
After collecting data and suggestions from the board, Hill and Hicks make the necessary adjustments and return to the board by Nov. 28 for an approval of the final budget.
All financial information is open to the public once it is approved and can be viewed at town hall. For further questions please contact Hicks at 873-0152.